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East TN businesses welcome online sales tax bill

7:38 PM, May 7, 2013   |    comments
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Online sales taxes are one step closer to becoming more common.

The U.S. Senate approved the Marketplace Fairness Act Monday with a 69 to 27 vote. The proposal would allow states to begin collecting sales tax from online retailers that make more than $1 million per year, even in states where they do not have a physical presence.

This idea has previously been a fictional dream for Knoxville's Union Ave. Books owner Flossie McNabb. She said, "We've been fighting this to level the playing field for all small businesses, mom and pop stores. We pay taxes, we collect taxes and we just ask that the big chains and big box stores do the same when they have a presence in our state."

Allan Benton's business, Benton's Bacon, has been bringing home the bacon from across the country. About 75 percent of the earnings for Benton's Bacon come from online sales, a huge slice of the business.

Still, Benton is in favor of the Marketplace Fairness Act saying, "It's going to level the playing field somewhat. It's probably going to have some adverse impact on places like mines that ship a lot of product, but it's probably long overdue."

University of Tennessee's Director of the Center for Business and Economic Research, Dr. Bill Fox, has been studying the impact of an internet sales tax since 1997. He said, "The key issue is to try to get the tax treatment of all sales the same. That way I just decide whether I want to shop in my pajamas at two o'clock in the morning or I want to go into the store, I do that based on those two different environments. Not because the government is taxing one and not the other."

The Marketplace Fairness Act now heads to the U.S. House, where it's expected to face a tougher fight.

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